Upon moving to the American League, Palmeiro was primarily used as a first baseman or designated hitter. Palmeiro blossomed as a hitter while with the Rangers, leading the league in hits in 1990 and doubles in 1991. In 1990, he was third in the American League in batting.

Prior to Palmeiro's 1995 season, he had hit more than 30 home runs only once (37 in 1993). Starting in 1995, Palmeiro began a streak of 38+ home run years that continued through the 2003 season. He hit 373 home runs during this nine-season span, while also driving in over 100 runs in each of these seasons. However, Palmeiro never led the league in home runs, and is history's most prolific home run hitter to have never won the home run crown.

On May 11, 2003, Palmeiro hit his 500th home run off David Elder in a game against the Cleveland Indians. Two years later, Palmeiro joined Hank Aaron, Willie Mays, and Eddie Murray as the only players in major league history to get 3,000 hits and 500 home runs when he got his 3,000th base hit off Joel Piñeiro during a game against the Seattle Mariners on July 15, 2005. Because most of Palmeiro's home runs came with the Rangers and Orioles, he is one of only four players in history to hit at least 200 home runs for two different clubs.

Palmeiro played in 2,831 major league games, the most by any player who never played in the World Series.

Palmeiro won three straight Gold Glove awards as a first baseman in the American League from 1997–1999. His 1999 award was highly controversial because Palmeiro had played just 28 games at first base,[5][6][7] compared to 128 games as the designated hitter.

Palmeiro filed for free agency on October 29, 2005, indicating he would attempt to play his 20th season in baseball.

Palmeiro was inducted into the Mississippi State University Hall of Fame on October 11, 2008.[8] In 2009, he was inducted into the National College Baseball Hall of Fame.[9] In 2012 Rafael Palmeiro was inducted into the Mississippi Sports Hall of Fame.[10]

Palmeiro became eligible for induction into the Baseball Hall of Fame in 2011. He received 64 votes, or 11.0 percent of total ballots cast; the threshold for entry is 75 percent. According to Barry M. Bloom on Major League Baseball's official website: "Palmeiro should have been a sure-fire first-ballot inductee, as a member of the 500-homer, 3,000-hit club, but was suspended in 2005 after testing positive for steroid use. He received only 11 percent of the vote.".[11] On January 8, 2014, Palmeiro received insufficient support to remain on the HOF ballot in future years, when he received only 25, or 4.4% of votes.[12]

Former Rangers teammate José Canseco identified Palmeiro as a fellow steroid user in his 2005 book, Juiced: Wild Times, Rampant 'Roids, Smash Hits & How Baseball Got Big, and claimed he personally injected Palmeiro with steroids. On March 17, 2005, Palmeiro appeared at a Congressional hearing about steroids in baseball and, while under oath, denied ever using steroids and stated, "Let me start by telling you this: I have never used steroids, period. I don't know how to say it any more clearly than that. Never."[13]

On August 1, 2005, Palmeiro was suspended for ten days after testing positive for a steroid.[14] The Washington Post reported that the steroid detected in Palmeiro's system was a "serious" one.[15] According to The New York Times, Palmeiro tested positive for the potent anabolic steroid stanozolol.[16] In a public statement, Palmeiro disclosed that an appeal of the suspension had already been denied. He released a statement saying, "I have never intentionally used steroids. Never. Ever. Period. Ultimately, although I never intentionally put a banned substance into my body, the independent arbitrator ruled that I had to be suspended under the terms of the program."[17] According to Palmeiro, all of his previous tests over the two years including the 2003 sealed test were negative, and a test he took just three weeks after his positive test was also negative.[18] The House Government Reform Committee would not seek perjury charges against Palmeiro, although they were not clearing him.[19]

Palmeiro returned to Camden Yards following his 10-day suspension on August 11, 2005, although he did not play in the lineup until August 14. Coincidentally, this was the date that had been planned as "Rafael Palmeiro Appreciation Day" in celebration of his 500-home run, 3,000-hit milestone. It was canceled after Palmeiro's suspension.[citation needed]The Baltimore Sun reported that Palmeiro never offered an explanation for his positive test to the MLB arbitration panel, which ran contrary to his public statements.[20]ESPN later reported that Palmeiro implicated Miguel Tejada to baseball's arbitration panel, suggesting a supplement provided to him by Tejada was responsible for his positive test. This supplement was supposedly vitamin B12, though it could have been tainted.[21] Tejada and two unnamed teammates provided B12 samples to the panel, which did not contain stanozolol. However, the committee did say they found "substantial inconsistencies between Mr. Tejada's accounts and the accounts of players A and B."[22] Tejada, who said he received shipments of B12 from the Dominican Republic, was later implicated for steroid use in the Mitchell Report.[23]

Palmeiro continues to strongly deny ever having used steroids intentionally, telling The Baltimore Sun in June 2006, "Yes sir, that's what happened. It's not a story; it's the reality of what happened", and "I said what I said before Congress because I meant every word of it."[24] Palmeiro passed a polygraph test in which he was not asked if he ever used steroids, but in which he did state that he unknowingly ingested them via a B12 injection.[22][25] A 2005 New York Times article expressed one writer's belief that Palmeiro's story could perhaps be the truth.[26]

In December 2007, Palmeiro was included in the Mitchell Report in which it was alleged that he used performance-enhancing drugs during his career. The report did not provide any new evidence and only recapped allegations made by José Canseco, Palmeiro's appearance before Congress, and his subsequent failed drug test. The report also details a conversation Larry Bigbie alleges he had with Palmeiro where he claims "Palmeiro asked him about his source of steroids and human growth hormone (the source was Kirk Radomski) and how the substances made him feel." Bigbie also stated that "Palmeiro denied in those conversations that he had ever used performance enhancing substances himself."[27]

On December 20, 2007, Palmeiro was also named in Jason Grimsley's unsealed affidavit as a user of amphetamines prior to their being banned by MLB.[28]